The company running three state hospitals is refusing to pay €36.5 million in unpaid taxes and has taken the tax commissioner to court to resolve the dispute. 

Steward Healthcare last month opened a civil case against Inland Revenue Department Commissioner Marvin Gaerty, after the company was served with a notice to pay €36.5 million in outstanding VAT dues, fines and other penalties.  

The case, instituted through its local company Steward Malta Management Limited, is to be heard before Mr Justice Christian Falzon Scerri next month.

Gaerty steps down as IRD commissioner at the end of the month. The case will continue with his successor Joseph Caruana representing the department.   

Steward is understood to be disputing the dues and is set to call in witnesses from the government and senior tax officials as part of its case. 

The court case has temporarily paused separate legal action which the tax department planned on taking against Steward later this year, after the company failed to pay taxes for four years.  

Earlier on Tuesday, press reports indicated that the healthcare company had been served with a notice by the tax authorities ordering it to pay tax dues.  

Steward Healthcare is responsible for running Karin Grech, St Luke's and Gozo General hospitals as part of a multi-million deal it took over from the original concessionaires, Vitals Global Healthcare (VGH). 

The €4 billion hospitals contract had been made on the promise that the private investors would spend €220 million to completely revamp the decrepit health facilities.

VGH however crashed out of the government contract just two years into the 2015 deal, with Steward Healthcare coming in to pick up the pieces.

The US company has been locked in talks with the government about improving the terms of the deal ever since taking over the contract from VGH. 

Former opposition leader Adrian Delia is leading a legal battle to overturn the government contract and return the hospitals to the public.  

The deal has also been the subject of a damning investigation by the National Audit Office.  

The NAO has said VGH should have been barred from winning the hospitals contract due to “collusive behaviour” with the government. 

In a follow-up report, the NAO found around 60 instances of VGH breaching its service obligations in the hospitals' contract, yet no action was ever taken.